LSI to Acquire IBMs Mylex Division

Storage subsystem maker LSI Logic Corp. will acquire IBMs Mylex division, which makes RAID technology, officials said today.
Mylex, based in Fremont, Calif., will bring low-end solutions to LSIs current mid-range and high-end offerings. The purchase should close by September 30, officials said.

Besides acquiring Mylexs technology--which includes controllers, subsystems and software--LSI, of Milpitas, Calif., will initially take on more than 100 of Mylexs engineers and sales representatives, plus its sales channel and existing customers including IBM itself, NEC Corp., Fujitsu-Siemens computers GmbH, Xyratex Technology Ltd. and Eurologic Ltd., officials said. LSI may later rehire other staff, officials said.

"High performance modular storage systems are proving to be the most cost effective and flexible solutions to meet growing customer storage needs under tight IT budget constraints," said Tom Georgens, LSIs president, in a press statement. "This acquisition strengthens our position and increases our development capabilities."
IBM bought Mylex in the summer of 1999 for $240 million. The price of todays deal was not disclosed, but the amount is well below the federal threshold of $50 million for which disclosure is required, sources close to LSI said.
IBM decided to sell Mylex because its products, though "fairly successful for us," had become too much of a commodity to fit into IBMs future plans, spokesman Michael Loughran said.
Even though IBM didnt do much with Mylexs technology, its an excellent fit for LSI, said industry analyst Randy Kerns, of Evaluator Group Inc., in Greenwood Village, Colo.
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